Quarterly Report First 9 Months 2017/18

Transcription

1 Quarterly Report First 9 Months 2017/18 October 1, 2017 to June 30, 2018

2 At a Glance Key Aurubis Group figures Operating Aurubis Group output/throughput 2017/18 20 Change 2017/18 20 Change Concentrate throughput 1,000 t % 1,913 1,804 6 % Copper scrap/blister copper input 1,000 t % % KRS throughput 1,000 t % % Sulfuric acid output 1,000 t % 1,826 1,757 4 % Cathode output 1,000 t % % Rod output 1,000 t % % Shapes output 1,000 t % % Flat rolled products and specialty wire output 1,000 t % % 2017/18 20 Change 2017/18 20 Change Revenues m 2,977 2,761 8 % 8,747 8,189 7 % Gross profit m % % Depreciation and amortization m % % EBITDA** m % % EBIT m % % EBT* m % % Consolidated net income m % % Earnings per share % % Net cash flow m % < -100 % Capital expenditure (including finance leases) m % % ROCE* % * Corporate control parameters. ** EBITDA (operating EBITDA) is determined from EBIT (operating EBIT) plus depreciation and amortization (operating depreciation and amortization). The derivation of operating figures is explained in the comments on the results of operations, net assets, and financial position (operating). Key Aurubis Group figures IFRS from continuing operations General Aurubis Group figures 2017/18 20 Change 2017/18 20 Change Copper price (average) US$/t 6,872 5, % 6,880 5, % Copper price (period end date) US$/t ,646 5, % Employees (average) 6,603 6,473 2 % 6,544 6,473 1 % 2017/18 20 Change 2017/18 20 Change Revenues m 2,626 2,444 7 % 7,787 7,327 6 % Gross profit m % % Personnel expenses m % % Depreciation and amortization m % % EBITDA m % % EBIT m % % EBT m % % Consolidated net income m % % Earnings per share % % 9M 9M 9M 9M 2 Aurubis Quarterly Report First 9 Months 2017/18

3 Table of Contents 4 Highlights 6 Economic Development First 9 Months 2017/18 6 Results of Operations, Net Assets, and Financial Position 14 Segment Metal Refining & Processing 18 Segment Flat Rolled Products 19 Corporate Governance 19 Risk and Opportunity Management 20 Outlook 22 Interim Consolidated Financial Statements First 9 Months 2017/18 22 Consolidated Income Statement 23 Consolidated Statement of Comprehensive Income 24 Consolidated Statement of Financial Position 26 Consolidated Cash Flow Statement 27 Consolidated Statement of Changes in Equity 28 Selected Notes to the Consolidated Financial Statements 30 Consolidated Segment Reporting 32 Dates and Contacts This report may include slight deviations in the totals due to rounding. Aurubis Quarterly Report First 9 Months 2017/18 3

4 Highlights The Aurubis Group generated operating earnings before taxes (EBT) of 264 million for the entire Group in the first nine months of FY 2017/18 (previous year: 211 million). The operating result was primarily influenced by positive contributions from our efficiency improvement program, substantially higher refining charges for copper scrap, and higher sulfuric acid revenues. The operating return on capital employed (ROCE) was 14.6 % (previous year: 13.0 %). IFRS earnings before taxes (EBT) from continuing operations (see page 5) were 313 million (previous year: 336 million). The Group generated revenues of 8,747 million during the first nine months of FY 2017/18 (previous year: 8,189 million). This development is primarily due to the increased copper price. Operating EBT was 264 million (previous year: 211 million) and was positively influenced by:» a higher concentrate throughput due to good performance at the Hamburg and Pirdop sites. The previous year was negatively impacted by a scheduled maintenance shutdown in Hamburg in Q1 20,» substantially higher refining charges for copper scrap with good availability,» higher sulfuric acid revenues due to price and volume factors,» a higher metal yield with increased copper prices,» significantly higher sales volumes for rod products,» higher sales volumes for flat rolled products,» and further positive contributions from our efficiency improvement program. The weaker US dollar had a counteracting effect. At a level of 14.6 %, operating ROCE (taking the operating EBIT of the last 4 quarters into consideration) was higher than the previous year (13.0 %) due to higher operating results. EBT from continuing operations on an IFRS basis amounted to 313 million (previous year: 336 million). The net cash flow as at June 30, 2018 was -100 million (previous year: 193 million). The significant decrease is mainly the result of higher inventories as at the period end date. Operating EBT for Segment Metal Refining & Processing (MRP) amounted to 289 million during the reporting period (previous year: 247 million). Higher concentrate throughputs due to the Hamburg and Pirdop sites good performance, substantially increased refining charges for copper scrap with good availability, higher sulfuric acid revenues due to price and volume factors, a higher metal yield with increased copper prices, and considerably higher rod sales volumes all had a positive effect on the result. The weaker US dollar had a negative effect on the result. The result of the first nine months of the previous year was impacted by some 15 million due to a scheduled maintenance shutdown at the Hamburg site in Q1 20. Segment Flat Rolled Products (FRP) generated operating EBT of 7 million in the first nine months of FY 2017/18 (previous year: -3 million). Positive effects deriving from the efficiency improvement program that is currently underway and higher sales volumes of flat rolled products had a significant impact. The term sheet covering the possible sale of Segment FRP to Wieland-Werke AG was signed on February 12, 4 Aurubis Quarterly Report First 9 Months 2017/18

5 2018. As a result, Segment FRP was classified as discontinued operations in accordance with IFRS. The business division FRP will continue to be managed within the Group on the basis of its operating result until the sales transaction is concluded. Consequently, Segment FRP is not classified as discontinued operations for operating reporting purposes. At the start of the reporting period, the copper price was US$ 6,455/t (LME settlement). It rose to US$ 7,203/t by the beginning of January, supported by reports from China concerning solid fundamental data and environmentally driven production restrictions. However, it declined to US$ 6,500/t by the end of March, particularly as a result of discussions about possible trade conflicts. Fears of an impending strike at one of the world s largest mines caused the copper price to rise again to over US$ 7,200/t in June. The average copper price in 2017/18 was US$ 6,872/t (previous year: US$ 5,662/t). The average price in euros was 5,768/t (previous year: 5,141/t). On the copper concentrate market, the good supply situation continued in the first nine months of FY 2017/18, due especially to higher output volumes from mines. On the one hand, production disruptions at mines, e.g., due to strikes, were lower than expected. On the other hand, the copper price, which has risen notably compared to the previous year, served in the reporting period as a strong incentive for the mining industry to maximize output and promote additional mine expansions. Additionally, isolated smelter shutdowns in Asia had a positive impact on concentrate availability. of copper concentrates, spot TC/RCs rose in of FY 2017/18 to levels exceeding the benchmark TC/RCs for At the start of the fiscal year, refining charges for copper scrap were at a very good level due to high metal prices. Negative weather-related influences were noticeable in early At the same time, higher competition for copper scrap, especially from China, increasingly placed pressure on refining charges. This impacted the availability of copper scrap and consequently the refining charges for processing copper scrap, which, in our opinion, nevertheless continue to be at a comparatively high level. The global market for sulfuric acid was characterized by consistently high demand. The overall availability of sulfuric acid was very limited, a situation that was reinforced by isolated smelter shutdowns, especially in Asia. This led to higher prices on the spot market. The cathode markets recorded good ongoing demand with slightly improved spot premiums in the first nine months of 2017/18. At a level of US$ 86/t, the Aurubis copper premium for calendar year 2018 is the same as in the previous year. Jürgen Schachler, Executive Board Chairman: Our 25 % higher earnings are the result of the many small and large measures related to our strategic initiatives at the same time, we are benefiting from the positive market environment. We therefore expect our operating result for the fiscal year to be at the upper end of our forecast. At the start of 2018, treatment and refining charges (TC/ RCs) for spot transactions were initially established at a lower level than the benchmark TC/RCs (according to Reuters) of US$ 82.25/t / cents/lb (previous year: US$ 92.50/t / 9.25 cents/lb). Due to the good availability Aurubis Quarterly Report First 9 Months 2017/18 5

6 Economic Development First 9 Months 2017/18 Results of Operations, Net Assets, and Financial Position In order to portray the Aurubis Group s operating success independently of measurement influences for internal management purposes, the presentation of the results of operations, net assets, and financial position is supplemented by the results of operations and net assets explained on the basis of operating values. With the signing of the term sheet on February 12, 2018, Segment Flat Rolled Products (FRP) fulfills the conditions to be recognized as discontinued operations in accordance with IFRS. In this respect, the presentation and measurement rules specified in IFRS 5 must be applied for Segment FRP. These include, among other things, a separate, aggregated disclosure of consolidated net income from discontinued operations in the consolidated income statement, as well as a separate, aggregated disclosure of assets and liabilities held for sale for the discontinued operations in the consolidated statement of financial position. Furthermore, additional disclosures must be made in the notes to the financial statements (see page 28 et seq. of this Quarterly Report). With respect to measurement in accordance with IFRS 5, among other things, any impact on income deriving from scheduled depreciation and amortization in Segment FRP, or from application of equity accounting for the purpose of consolidating the investment in the joint venture, Schwermetall Halbzeugwerk GmbH & Co. KG (Schwermetall), must be discontinued in the IFRS consolidated financial statements. The Executive Board continues to treat Segment FRP as an operating reporting segment and, consequently, the financial reporting for operating purposes will remain unchanged until such time as the sales transaction, which is subject to approval by the antitrust authorities, is finalized. As a result, the accounting impacts deriving from IFRS 5 in the financial statements are reversed in the reconciliation between IFRS reporting and operating reporting. As regards the reconciliation of the consolidated income statement, the items reported as discontinued activities are again shown separately. For purposes of measurement, the impacts on income deriving from scheduled depreciation and amortization of fixed assets or from application of equity accounting for the purpose of consolidating the investment are accounted for, as in the past. In order to demonstrate the Aurubis Group s operating success, subsequent adjustments are also made to inventories and non-current assets. In order to adjust the measurement impacts in assets resulting from the application of IAS 2, metal price fluctuations resulting from the application of the average cost method are eliminated in the same manner as any write-downs or appreciation in value for copper inventories at the reporting date. Furthermore, from FY 2010/11 onwards, fixed assets have been adjusted for effects deriving from purchase price allocations (PPAs), primarily relating to property, plant, and equipment. As regards the reconciliation of the consolidated statement of financial position, assets and liabilities held for sale as discontinued operations are disclosed in a disaggregated form and the measurement effects on the relevant items in the statement of financial position are recognized as they have been in the past. Subsequently, in order to demonstrate the Aurubis Group s operating success, measurement impacts on inventories and fixed assets are adjusted for, as was the case in the past. The table on page 7 shows how the operating result for the first nine months of FY 2017/18 and for the comparative prior-year period have been determined. 6 Aurubis Quarterly Report First 9 Months 2017/18

7 Reconciliation of the consolidated income statement (in million) 9M 2017/18 9M 20 Adjustment effects PPA IFRS from continuing operations Operating Adjustment effects Operating Discontinued operations Inventories Discontinued operations Inventories Revenues 7, ,747 7, ,189 Changes in inventories of finished goods and work in process PPA IFRS from continuing operations Own work capitalized Other operating income Cost of materials -7, ,171-6, ,347 Gross profit Personnel expenses Depreciation and amortization of intangible assets and property, plant, and equipment Other operating expenses Operational result (EBIT) Result from investments measured using the equity method Interest income Interest expenses Other financial expenses Earnings before taxes (EBT) Income taxes Consolidated net income See page 6 for an explanation of the presentation and the adjustment effects. The prior-year presentation has been adjusted. Aurubis Quarterly Report First 9 Months 2017/18 7

8 Results of operations (operating) Operating EBT in the first nine months of the fiscal year amounted to 264 million and is derived from continuing and discontinued operations of the IFRS result as follows: Aurubis generated IFRS earnings before taxes of 313 million in the first nine months of the fiscal year (previous year: 336 million). IFRS earnings before taxes from discontinued operations amount to 37 million (previous year: 35 million). The accounting impacts of IFRS 5 were reversed to derive the operating result. Consequently, scheduled amortization ( -5 million), as well as the adjustment of investments in Schwermetall consolidated using the equity method and recognized in income ( 4 million), have been included in the operating result as they have been up to now. To derive the operating result, the IFRS result was adjusted for inventory measurement effects of -88 million (previous year: -163 million) (the total of the following positions: Changes in inventories of finished goods and work in process, Cost of materials, and Result from investments measured using the equity method), as well as for impacts of 2 million (previous year: 3 million) deriving from allocations of the purchase price, resulting in operating earnings before taxes of 264 million (previous year: 211 million). Operating EBT was positively influenced by:» a higher concentrate throughput due to good performance at the Hamburg and Pirdop sites. The previous year was negatively impacted by a scheduled maintenance shutdown in Hamburg in Q1 20,» substantially higher refining charges for copper scrap with good availability,» higher sulfuric acid revenues due to price and volume factors,» a higher metal yield with increased copper prices,» significantly higher sales volumes for rod products,» higher sales of flat rolled products,» further positive contributions from our efficiency improvement program. The weaker US dollar had a counteracting effect. The Group s revenues increased by 558 million to 8,747 million (previous year: 8,189 million) during the reporting period. This development was primarily due to the higher average copper price. The inventory change of 307 million (previous year: -17 million) was due in particular to a build-up of copper and precious metal inventories. In a manner corresponding to the development for revenues and inventory changes, the cost of materials developed from 7,347 million in the previous year to 8,171 million. After taking own work capitalized and other operating income into account, the residual gross profit was 929 million (previous year: 867 million). At 364 million, personnel expenses were slightly above the previous year (previous year: 357 million) due to wage increases resulting from collective agreements and a slightly higher number of employees. Lower personnel costs at the Buffalo, USA, site resulting from the exchange rate had a counteracting effect. Depreciation and amortization of fixed assets and other operating expenses were both slightly above prior-year level. Operating earnings before interest and taxes (EBIT) therefore amounted to 269 million (previous year: 220 million). 8 Aurubis Quarterly Report First 9 Months 2017/18

9 At 11 million, net interest expense was below prior-year level ( 12 million). The decrease resulted from reduced gross debt in connection with the redemption of bonded loans (Schuldscheindarlehen). After incorporating the financial result, operating earnings before taxes (EBT) were 264 million (previous year: 211 million). Operating consolidated net income of 201 million remained after tax (previous year: 161 million). Operating earnings per share amounted to 4.46 (previous year: 3.57). Results of operations (IFRS) from continuing operations Due to the classification of Segment FRP as an operation intended for sale, the following values regarding the results of operations are exclusively related to continuing operations. The Aurubis Group generated a consolidated net result of 239 million in the first nine months of FY 2017/18 (previous year: 258 million). The Group s revenues increased by 460 million to 7,787 million (previous year: 7,327 million) during the reporting period. This development was primarily due to the higher average copper price. The inventory change of 320 million (previous year: 31 million) was due in particular to a build-up of copper and precious metal inventories. In a manner corresponding to the development for revenues and inventory changes, the cost of materials increased by 767 million, from 6,548 million in the previous year to 7,315 million. After taking own work capitalized and other operating income into account, the residual gross profit was 837 million (previous year: 852 million). In addition to the effects on earnings described in the explanation of the operating results of operations, the change in gross profit was also due to metal price developments. The use of the average cost method leads to metal price valuations that are close to market prices. Metal price volatility therefore has direct effects on changes in inventories/the cost of materials and hence on the IFRS gross profit. This is independent of the operating performance and is not relevant to the cash flow. Aurubis Quarterly Report First 9 Months 2017/18 9

10 At 266 million, personnel expenses were above the prior year ( 258 million) due to wage increases resulting from collective agreements and a slightly higher number of employees. Depreciation and amortization of fixed assets and other operating expenses were both slightly above prior-year level. Earnings before interest and taxes (EBIT) therefore amounted to 322 million (previous year: 348 million). At 9 million, net interest expense was below prior-year level ( 11 million). The decrease resulted from reduced gross debt in connection with the redemption of bonded loans (Schuldscheindarlehen). After taking the financial result into account, earnings before taxes were 313 million (previous year: 336 million). Consolidated net income of 239 million from continuing operations remained after tax (previous year: 258 million). Earnings per share from continuing operations amounted to 5.31 (previous year: 5.73). Net assets (operating) The table on page 11 shows the derivation of the operating statement of financial position as at June 30, 2018, as compared to the situation at September 30, Total assets increased from 3,975 million as at September 30, 2017 to 4,296 million as at June 30, 2018, primarily due to increased inventories. The Group s equity increased by 112 million, from 2,087 million as at the end of the last fiscal year to 2,199 million as at June 30, This was largely due to the operating consolidated net income of 201 million. The dividend payment of 66 million and the measurements at market of hedges, amounting to 21 million and shown in equity, had a counteracting effect. Current liabilities (trade accounts payable) increased in line with the higher inventories. Overall, the operating equity ratio (the ratio of equity to total assets) is therefore 51.2 % compared to 52.5 % as at the end of the previous fiscal year. The following table shows the development of borrowings: (in million) 6/30/2018 9/30/2017 Non-current bank borrowings Non-current liabilities under finance leases Non-current borrowings Current bank borrowings 14 8 Current liabilities under finance leases 3 3 Current borrowings Total borrowings Aurubis Quarterly Report First 9 Months 2017/18

11 Reconciliation of the consolidated statement of financial position (in million) Assets IFRS 6/30/2018 9/30/2017 Adjustment effects PPA IFRS Adjustment effects Operating Discontinued operations Inventories Inventories PPA Operating Fixed assets 1, ,443 1, ,444 Deferred tax assets Non-current receivables and other assets Inventories 2, ,974 1, ,386 Current receivables and other assets Cash and cash equivalents Assets held for sale Total assets 4, ,296 4, ,975 Equity and liabilities Equity 2, ,199 2, ,087 Deferred tax liabilities Non-current provisions Non-current liabilities Current provisions Current liabilities 1, ,352 1, ,100 Liabilities deriving from assets held for sale Total equity and liabilities 4, ,296 4, ,975 See page 6 for an explanation of the presentation and the adjustment effects. Aurubis Quarterly Report First 9 Months 2017/18 11

12 At 301 million as at June 30, 2018, borrowings were below the level of the previous fiscal year-end ( 351 million). The primary reason for this was the redemption of bonded loans (Schuldscheindarlehen) in February Return on capital (operating) The return on capital employed (ROCE) shows the return on the capital employed in the operating business or for an investment. It was determined taking the operating EBIT of the last 4 quarters into consideration. Operating ROCE was 14.6 % due to the higher operating result, compared to 13.0 % in the comparative period. (in million) 6/30/2018 6/30/2017 Fixed assets excluding financial fixed assets and investments measured using the equity method 1,376 1,381 Inventories 1,974 1,474 Trade accounts receivable Other receivables and assets Trade accounts payable -1, Provisions and other liabilities Capital employed as at the period end date 2,435 2,222 Earnings before taxes (EBT) Financial result 5 13 Earnings before interest and taxes (EBIT)* Return on capital employed (operating ROCE) * rolling last 4 quarters % 13.0 % Net assets (IFRS) from continuing operations Due to the classification of Segment FRP as discontinued operations, the following values regarding net assets in the current year are mainly related to the continuing operations in the Group. Total assets increased from 4,361 million as at the end of the last fiscal year to 4,758 million as at June 30, 2018, due in particular to higher inventories as at the period end date. The Group s equity increased by 179 million, from 2,366 million as at the end of the last fiscal year to 2,545 million as at June 30, This was largely due to the consolidated net income of 239 million from continuing operations. The dividend payment of 66 million and the measurements at market of hedges, amounting to 21 million and shown in equity, had a counteracting effect. Current liabilities (trade accounts payable) increased in line with the higher inventories. Overall, the equity ratio was 53.5 % on June 30, 2018, compared to 54.2 % as at the end of the previous fiscal year. The following table shows the development of borrowings: (in million) 6/30/2018 9/30/2017 Non-current bank borrowings Non-current liabilities under finance leases Non-current borrowings Current bank borrowings 8 8 Current liabilities under finance leases 3 3 Current borrowings Total borrowings Aurubis Quarterly Report First 9 Months 2017/18

13 Return on capital (IFRS) The operating result is used for control purposes within the Group. The operating ROCE is explained in the section Return on capital (operating). Financial position and capital expenditure The following comments include both continuing and discontinued operations. At -100 million as at June 30, 2018, the net cash flow was significantly below the prior-year level ( 193 million). This was due in particular to higher inventories as at the period end date. The cash outflow from investing activities totaled 79 million (previous year: 122 million). The sale of a property held as a financial investment had a positive effect of about 8 million on the cash flow from investment activity in the reporting period. The cash outflow in the previous year was influenced by a larger individual investment in connection with our long-term electricity supply agreement. After deducting the cash outflow from investing activities of 79 million from the net cash flow of -100 million, the free cash flow amounts to -179 million (previous year: 71 million). The cash outflow from financing activities amounted to 140 million (previous year: 210 million). Cash and cash equivalents of 252 million from continuing and discontinued operations were available to the Group as at June 30, 2018 ( 571 million as at September 30, 2017). Aurubis Quarterly Report First 9 Months 2017/18 13

14 Segment Metal Refining & Processing 2017/18 20 Change 2017/18 20 Change 9M Revenues m 2,620 2,441 7 % 7,775 7,317 6 % Operating EBIT m % % Operating EBT m % % Operating ROCE (rolling EBIT for the last 4 quarters) % Capital employed m ,009 1, % Concentrate throughput 1,000 t % 1,913 1,804 6 % Hamburg 1,000 t % % Pirdop 1,000 t % 1, % Copper scrap/blister copper input 1,000 t % % KRS throughput 1,000 t % % Sulfuric acid output 1,000 t % 1,826 1,757 4 % Hamburg 1,000 t % % Pirdop 1,000 t % 1,043 1,020 2 % Cathode output 1,000 t % % Hamburg 1,000 t % % Lünen 1,000 t % % Olen 1,000 t % % Pirdop 1,000 t % % Rod 1,000 t % % Shapes 1,000 t % % Copper price (average) US$/t 6,872 5, % 6,880 5, % /t 5,768 5, % 5,738 5, % Gold (average) US$/kg 41,993 40,415 4 % 41,930 39,609 6 % /kg 35,228 36,696-4 % 34,956 36,613-5 % Silver (average) US$/kg % % /kg % % Segment Metal Refining & Processing Segment Metal Refining & Processing (MRP) processes complex metal concentrates, copper scrap, and metalbearing recycling materials into metals of the highest quality. Among other items, copper cathodes are manufactured at the Hamburg (Germany), Pirdop (Bulgaria), Olen (Belgium), and Lünen (Germany) sites; these cathodes are processed further into rod and shapes at the Hamburg (Germany), Olen (Belgium), Emmerich (Germany), and Avellino (Italy) sites. The segment commands a broad product portfolio, which results from the processing and optimal utilization of concentrates and of raw materials for recycling that have complex qualities. In addition to high-purity copper, this includes (among other metals) gold, silver, lead, nickel, tin, minor metals, platinum group metals, as well as a number of other products such as sulfuric acid and iron silicate. Segment MRP generated revenues of 7,775 million during the reporting period (previous year: 7,317 million). This increase in revenues is primarily due to higher copper prices. Operating EBT for Segment MRP rose by about 17 % to 289 million during the reporting period (previous 14 Aurubis Quarterly Report First 9 Months 2017/18

15 year: 247 million). Higher concentrate throughputs due to the Hamburg and Pirdop sites good performance, substantially increased refining charges for copper scrap with good availability, higher sulfuric acid revenues due to price and volume factors, a higher metal yield with increased copper prices, considerably higher rod sales volumes, and positive contributions from our efficiency improvement program all had a positive effect on the result after the first nine months of 2017/18. The weaker US dollar had a negative impact on the result. The operating EBT of the first nine months of the previous year was impacted by around 15 million due to a scheduled maintenance shutdown carried out at the Hamburg site in Q1 20. Due to its good availability, a higher level of copper scrap/blister copper was used at good conditions in 2017/18. Raw materials There was a good supply situation for copper concentrates in the first nine months of FY 2017/18, due especially to higher output volumes from mines and isolated smelter shutdowns. The copper price, which has risen notably compared to the previous year, served in the reporting period as a strong incentive for the mining industry to maximize output and promote additional mine expansions. Aurubis also benefited and was able to procure a sufficient supply of copper concentrates. Additionally, isolated smelter shutdowns in Asia had a positive impact on concentrate availability. At the start of the fiscal year, refining charges for copper scrap were at a very good level due to high metal prices. Negative weather-related influences were noticeable in early At the same time, higher competition for copper scrap, especially from China, increasingly placed pressure on refining charges. China s imports of copper scrap with high copper contents increased due to legal restrictions on imports of complex recycling materials to China. The competitive situation continued in of FY 2017/18. Accordingly, the developments described impacted the availability of copper scrap and consequently the refining charges for processing copper scrap, which, in our opinion, nevertheless continue to be at a comparatively high level. Because of the good overall availability of copper scrap, our facilities were fully supplied during the reporting period. The availability of complex recycling materials, including industrial residues and electrical and electronic scrap, was stable despite intense competition for these materials. According to Reuters, a leading mining company and a larger Chinese copper smelter signed the first larger annual contract for 2018 at benchmark TC/RCs of US$ 82.25/t / cents/lb (previous year: US$ 92.50/t / 9.25 cents/lb). Initially, a lower level was established for spot transactions in early 2018; in 2017/18 in particular, spot TC/RCs then rose to levels above the benchmark TC/RCs for The primary reasons for this were the good copper concentrate supply situation due to the fact that strike activities were lower than expected, especially at the South American mines. Aurubis Quarterly Report First 9 Months 2017/18 15

16 Concentrate throughput in 2017/18 influenced by a scheduled repair shutdown in the Hamburg anode furnace Aurubis Group concentrate throughput (in 1,000 t) Rod output at a high level again in 2017/18 Rod output (in 1,000 t) /16 Q4 15/16 Q1 Q2 Q4 Q1 17/18 Q2 17/18 17/18 15/16 Q4 15/16 Q1 Q2 Q4 Q1 17/18 Q2 17/18 17/18 Stable cathode output due to good demand Aurubis Group cathode output (in 1,000 t) shapes output at level of previous year, with robust demand Shapes output (in 1,000 t) /16 Q4 15/16 Q1 Q2 Q4 Q1 17/18 Q2 17/18 17/18 15/16 Q4 15/16 Q1 Q2 Q4 Q1 17/18 Q2 17/18 17/18 Production The good performance of both the Hamburg and Pirdop sites led to a concentrate throughput of 1,913,000 t, which was 6 % above the previous year. The optimization measures from the Fit for Future program took full effect in Pirdop for the first time. In the previous year, concentrate throughput had been strained by the scheduled maintenance shutdown at the Hamburg site in Q1 20. Concentrate throughput in Hamburg in 2017/18 was influenced by a scheduled repair shutdown in the anode furnace. The KRS throughput was up on the previous year as a result of our good input mix and the good availability of recycling materials. At 595,000 t, rod output significantly exceeded the prior 16 Aurubis Quarterly Report First 9 Months 2017/18

17 year (541,000 t) due to stable, good demand. Product markets Demand for copper rod reflects an ongoing positive trend. This stable development is supported equally by demand momentum from the construction sector, the automotive industry, and the enameled wire industry. There was also good demand for energy cable. In the first nine months of 2017/18, there was stronger demand growth in our key European markets especially. High European demand for flat rolled products led to a positive demand trend for high-purity shapes. The cathode markets recorded good ongoing demand with slightly improved spot premiums in the first nine months of 2017/18. At US$ 86/t, the Aurubis copper premium for calendar year 2018 is the same as in the previous year. We were generally able to realize this premium for our products in the reporting period. The global market for sulfuric acid was characterized by consistently high demand. The overall availability of sulfuric acid was very limited, a situation that was reinforced by isolated smelter shutdowns, especially in Asia. This led to considerably higher prices on the spot market during the reporting period. Within the scope of our multi-metal strategy, we have been reporting sales volumes for lead, nickel, tin, minor metals, and platinum group metals since the start of the fiscal year, in addition to gold and silver. Sales volumes 9M 17/18 9M Gold t Silver t Lead t 14,413 14,813 Nickel t 2,197 2,080 Tin t 1,466 1,087 Minor metals t Platinum group metals (PGM) kg 6,654 7,053 The recovery of our metals depends on the metal contents in the processed copper concentrates and recycling materials. A portion of the metals is sold in the form of intermediate products. Capital expenditure Capital expenditure in the segment amounted to 98 million (previous year: 130 million). The main individual investments were infrastructure measures in Bulgaria and investments for the district heating project Hamburg Hafencity East. The capital expenditure of the previous year was influenced by investments in connection with long-term electricity procurement. In the coming years, we will invest approximately 320 million to implement our important internal growth and investment project Future Complex Metallurgy (FCM). After the construction and start-up phases, FCM is expected to yield an EBITDA of about 80 million per year beginning in FY 2022/23. FCM is currently in the basic engineering phase and is thus fully on schedule. With this and other projects, we want to increase sales volumes of all non-copper metals by 100 % compared to FY 20 by FY 2022/23. For the same time period, we are also planning to double the input of complex scrap and to open up new sales channels for high-growth applications. Aurubis Quarterly Report First 9 Months 2017/18 17

18 Segment Flat Rolled Products 2017/18 20 Change 2017/18 20 Change 9M Revenues m % 1,106 1, % Operating EBIT m % 7-2 >100 % Operating EBT m % 7-3 >100 % Operating ROCE (rolling EBIT for the last 4 quarters) % Capital employed m % Flat rolled products and specialty wire output 1,000 t % % Segment Flat Rolled Products In Segment Flat Rolled Products (FRP), copper and copper alloys primarily brass, bronze, and highperformance alloys are processed into flat rolled products and specialty wire. The main production sites are Stolberg (Germany), Pori (Finland), Zutphen (Netherlands), and Buffalo (USA). Furthermore, the segment also includes slitting and service centers in Birmingham (UK), Dolný Kubín (Slovakia), and Mortara (Italy), as well as sales offices worldwide. Revenues in Segment FRP amounted to 1,106 million during the reporting period (previous year: 1,002 million) and, in addition to higher sales volumes, were influenced in particular by higher metal prices. The weaker US dollar strained revenues compared to the previous year. Product markets The market for flat rolled products continued to develop positively in the reporting period. Capacity utilization was good. Growth momentum was evident among connector and cable manufacturers in Europe in particular. Individual sales segments in the US market lagged behind expectations. Raw materials The metal prices, which increased during the reporting period, had a positive impact on the availability of input metals. Production The output of flat rolled products and specialty wire rose to 178,000 t due to demand (previous year: 172,000 t). Segment FRP generated operating EBT of 7 million in the first nine months of FY 2017/18 (previous year: -3 million). Positive effects deriving from the efficiency improvement program that is currently underway and higher sales of flat rolled products had a significant impact. Flat rolled products and specialty wire output develops positively again in due to demand Flat rolled products and specialty wire output (in 1,000 t) Operating ROCE (taking the operating EBIT of the last 4 quarters into consideration) was 3.0 % (previous year: 0.0 %) On March 29, 2018, Aurubis AG signed a contract with Wieland-Werke AG for the sale of Segment FRP. The transaction is subject to approval by the antitrust authorities. 15/16 Q4 15/16 Q1 Q2 Q4 Q1 17/18 Q2 17/18 17/18 18 Aurubis Quarterly Report First 9 Months 2017/18

19 Capital expenditure Capital expenditure in Segment FRP amounted to 13 million (previous year: 10 million). This was primarily applied to replacement investments. Corporate Governance Effective June 22, 2018, the District Court of Hamburg appointed Andrea Bauer, member of the VDM Metals management and CFO of the VDM Metals Group, as a new member of the Aurubis AG Supervisory Board. The appointment expires at the close of the next Annual General Meeting. Andrea Bauer replaces former Supervisory Board member Edna Schöne, who stepped down on June 15, 2018 for personal reasons. On March 29, 2018, Aurubis AG, Hamburg, and Wieland- Werke AG, Ulm, signed the contract to sell Segment Flat Rolled Products. The final execution of the sales contract is subject to approval by the EU antitrust authorities. On August 1, 2018, the EU antitrust authorities announced that they would like to review the planned sale of Segment Flat Rolled Products to Wieland-Werke AG more extensively. This so-called second phase could extend until the end of calendar year On July 13, 2018, the German Bundeskartellamt (federal antitrust authorities) issued authorization for the planned acquisition of the outstanding shares (40 %) of Deutsche Giessdraht GmbH by Aurubis AG. The antitrust authorities consent was a prerequisite for completing the acquisition. The closing of the transaction was final on July 31, Please also refer to the information published in the Annual Report 20, the Quarterly Report First 3 Months 2017/18, and the Interim Report First 6 Months 2017/18. Risk and Opportunity Management The risks and opportunities outlined in the Annual Report 20 and in the Interim Report First 6 Months 2017/18 did not fundamentally change in. Aurubis Quarterly Report First 9 Months 2017/18 19

20 Outlook Raw material markets We anticipate a good supply of copper concentrates and corresponding treatment and refining charges. On the copper scrap market, the current downward metal price trend could lead to a reduction in the copper scrap supply and thus to lower refining charges. Our facilities are fully supplied at good conditions until the end of the fiscal year. Product markets Copper products In the next few months, we expect good sales volumes for rod and stable demand for shapes. We expect demand for flat rolled products to continue at a strong level, especially for higher-end products like high-performance alloys and tin-coated strip. We anticipate robust demand with positive momentum from the connector sector. Sulfuric acid Due to high demand and low stock levels on the global market for sulfuric acid, we expect a continuation of stable prices at a high level in the coming months. Copper production We expect the volume of copper concentrates processed during the current fiscal year to be higher than in the previous year, with high plant availability and higher cathode output compared to the previous year. A scheduled maintenance shutdown is planned for our Bulgarian site in Q2 of FY 2018/19, which will have an impact of about 12 million on earnings. Expected earnings Despite the reduced 2018 benchmark, we expect satisfactory treatment and refining charges for concentrates for Aurubis until the end of the fiscal year. With good ongoing output levels at mines, we will continue to be able to procure a sufficient supply of copper concentrates. Due to our core expertise in processing complex concentrates, we will achieve TC/ RCs above the benchmark. For copper scrap, we anticipate satisfactory supply quantities with a continued good level of refining charges in the next few months as well. Aurubis left the copper premium at US$ 86/t for calendar year For the most part, we expect to be able to realize this premium for our products. For copper rod, we anticipate that demand will remain stable for the whole year and substantially exceed that of the previous year. We also predict that demand for shapes products in the fiscal year will slightly exceed that of the previous year. Likewise, we expect demand slightly above the previous year s level for flat rolled products and specialty wire for this fiscal year. We expect a considerably more positive development in sulfuric acid revenues compared to the previous year. Significant portions of our revenues are based on the US dollar. We use our hedging strategy to mitigate negative contributions to results deriving from a US dollar that is weaker than in the previous year. We expect to achieve the target of an additional 30 million that we set for 2017/18 for the efficiency improvement program within the context of the ONE Aurubis project. It will lead to further optimization at all the sites. As a result of the positive business development, the Group has already increased its full-year forecast for 20 Aurubis Quarterly Report First 9 Months 2017/18

21 operating EBT in the current FY 2017/18 within the context of its report on the first half of FY 2017/18. Compared to FY 20, the Aurubis Group now expects a moderately higher operating EBT, with ROCE at the prior-year level. In Segment Metal Refining & Processing, we expect operating EBT to be moderately higher than the previous year and operating ROCE to be at prior-year level for FY 2017/18. In Segment Flat Rolled Products, we anticipate significantly higher operating EBT for FY 2017/18 and a slightly higher operating ROCE compared to the previous year. Qualified comparative forecast according to Aurubis definition for operating EBT Change in operating EBT At prior-year level ± 0 to 5.0 % Moderate ± 5.1 to 15.0 % Significant > ± 15.0 % Qualified comparative forecast according to Aurubis definition for operating ROCE ROCE delta as a percentage At prior-year level ± 0 to 1.0 Slight ± 1.1 to 4.0 Significant > ± 4.0 Aurubis Quarterly Report First 9 Months 2017/18 21

22 Interim Consolidated Financial Statements First 9 Months 2017/18 Consolidated Income Statement (IFRS, in thousand) 9M 2017/18 9M 20 Revenues 7,786,899 7,327,108 Changes in inventories of finished goods and work in process 319,731 30,398 Own work capitalized 11,490 6,516 Other operating income 33,692 34,696 Cost of materials -7,315,046-6,546,835 Gross profit 836, ,883 Personnel expenses -265, ,291 Depreciation and amortization of intangible assets and property, plant, and equipment -89,184-87,991 Other operating expenses -159, ,892 Operational result (EBIT) 322, ,709 Interest income 2,446 1,936 Interest expenses -11,789-13,970 Other financial income Other financial expenses Earnings before taxes (EBT) 313, ,394 Income taxes -74,298-78,057 Consolidated net income from continuing operations 239, ,337 Consolidated net income from discontinued operations 29,622 26,518 Consolidated net income 268, ,855 Consolidated net income attributable to Aurubis AG shareholders 267, ,902 Consolidated net income attributable to non-controlling interests 1, Basic earnings per share (in ) From continuing operations From discontinued operations Diluted earnings per share (in ) From continuing operations From discontinued operations Prior-year figures have been adjusted. 22 Aurubis Quarterly Report First 9 Months 2017/18

23 Consolidated Statement of Comprehensive Income (IFRS, in thousand) 9M 2017/18 9M 20 Consolidated net income 268, ,855 Items that will be reclassified to profit or loss in the future Measurement at market of cash flow hedges -20,995 17,394 Measurement at market of financial investments ,782 Changes deriving from translation of foreign currencies -1, Income taxes 4,833-4,002 Share of other comprehensive income attributable to discontinued operations Items that will not be reclassified to profit or loss Remeasurement of the net liability deriving from defined benefit obligations -7,980 53,714 Income taxes 2,588-17,411 Other comprehensive income -22,815 53,437 Consolidated total comprehensive income 246, ,292 Consolidated total comprehensive income attributable to Aurubis AG shareholders 244, ,339 Consolidated total comprehensive income attributable to non-controlling interests 1, Prior-year figures have been adjusted. Aurubis Quarterly Report First 9 Months 2017/18 23

24 Consolidated Statement of Financial Position (IFRS, in thousand) ASSETS 6/30/2018 9/30/2017 Intangible assets 121, ,618 Property, plant, and equipment 1,169,800 1,269,836 Investment property 0 7,955 Financial fixed assets 28,796 29,680 Investments measured using the equity method 0 50,223 Deferred tax assets 2,503 5,747 Non-current financial assets 26,250 30,094 Other non-current non-financial assets 823 2,226 Non-current assets 1,350,106 1,527,379 Inventories 2,122,934 1,752,272 Trade accounts receivable 309, ,403 Other current financial assets 56, ,096 Other current non-financial assets 52,222 53,300 Cash and cash equivalents 233, ,569 Assets held for sale 634,096 0 Current assets 3,408,005 2,833,640 Total assets 4,758,111 4,361, Aurubis Quarterly Report First 9 Months 2017/18

25 Consolidated Statement of Financial Position (IFRS, in thousand) EQUITY AND LIABILITIES 6/30/2018 9/30/2017 Subscribed capital 115, ,089 Additional paid-in capital 343, ,032 Generated Group earnings 2,067,803 1,870,573 Accumulated other comprehensive income components 16,532 33,955 Equity attributable to shareholders of Aurubis AG 2,542,456 2,362,649 Non-controlling interests 3,033 3,097 Equity 2,545,489 2,365,746 Pension provisions and similar obligations 222, ,682 Other non-current provisions 54,791 63,678 Deferred tax liabilities 206, ,134 Non-current borrowings 283, ,266 Other non-current financial liabilities 2,711 2,752 Non-current non-financial liabilities 0 1,213 Non-current liabilities 770, ,725 Current provisions 33,653 39,013 Trade accounts payable 1,078, ,083 Income tax liabilities 13,820 19,959 Current borrowings 10,469 11,068 Other current financial liabilities 111, ,729 Other current non-financial liabilities 20,006 33,696 Liabilities deriving from assets held for sale 174,187 0 Current liabilities 1,442,067 1,138,548 Total liabilities 4,758,111 4,361,019 Aurubis Quarterly Report First 9 Months 2017/18 25